[JennysCool]

What we really need is a BDS default.

[Chaguito]

Why aren’t the CEOs of Fannie and Freddie committing seppuku? Oh, yeah, gotta get Obama elected.

[ex-Texan]

Is that really $62,000 Billion ___________ ?

[CharlesWayneCT]

That means that meeting any claims on CDS may not be that costly, although the details are still being worked out and the impact is unknown.

The headline kind of makes it sound more serious than this final sentence does.

[bruinbirdman]

NVDave wrote on another thread last night:

"Is putting Fannie/Freddie into conservatorship going to trigger default swaps on the paper? Is the Treasury seizing control of the GSE’s considered a “credit event” that triggers the swaps?

If it does, I think that there’s going to be some more pain than the boys at Treasury think, and a whole lot more behind the scenes wrangling necessary to keep the debt markets from going ape than just this plan.

yitbos

[caisson71]

I cannot see how the government’s takeover of Fannie/Freddie is any better. Government always fails, everytime it is tried. Are these not the same people (Congress) who had oversight of Fannie/Freddie? Are these not the same people who urged Frannie/Freddie to back loans to borrowers who had bad credit and insufficient incomes to pay their mortgages? Are we nuts?

[ckilmer]

I heard on Rush today that HUD back in the 90’s under Andrew Cuomo mandated that freddie and fannie had to make loans to low income households–ie high risk households. And this on top of the loans to low income neighborhoods (ie high risk loans) fostered by the Community Reinvestment Act 1979.

The CDO concept was developed by (convicted) Michael Milken of (now-defunct) Drexel Burnham Lambert. After the securities scandal, the vehicle lay dormant until picked up by the mortgage industry around 1999/2000. CSPAN aired an interview with a journalist who looked into the subject; took more than a few calls from some articulate folks who objected to placing the blame on Fannie/Freddie for exactly the reason I stated. The CDO package - courtesy of Mikey Milken - is flawed.

[dennisw]

This is what capitalism USA has come to. We don’t produce shit but we sure do know how to trade derivatives and other loony financial instruments (CDOs). We sure know how to flip illegal alien built houses. We sure know how to get Gubbermint agencies like Freddy Mac to demand by law more home loans for the poor and illegal immigrants

I liked the old robber barons and captaisn of industry. At lesat they got rich making useful trhings

[RSmithOpt]

Just the tip of the iceberg, folks. Greenspan's "imaginations" that were "created into place" have allowed the manipulation of the financial and commodities markets with imaginary monies.

The use of imaginary monies (heavy over leveraging) have been used through the years to cook the books so those at the top could skim their fat bonuses, i.e. real money.

Amazing the hoodwink allowed to basically bet the same money over and over again at the same time in different crap games and the shooter carrying a pair o loaded dice.

The depth of the level of the deceitful debt shell game is just now starting to show and peoples' retirement funds was the front monies laid at risk.